"Everything passed through my hands: beef, horse, old meat that stank, sometimes even 'fresh' meat but it wasn't exactly fresh … Yes, I cut horse. I suspected there was something wrong but I just did what I was told to do," Jan Kowalski told us.

Kowalski (not his real name) is one of 85 Polish migrant workers who were employed at a meat processing plant in the Netherlands that was raided by the Dutch authorities in February as part of their investigation into horsemeat fraud.

Guardian interviews with Kowalski and an official from the Dutch meat union representing the Poles have thrown new light on how thousands of horses allegedly entered the food chain in place of beef over many years at the Willy Selten factory in Oss, south of Rotterdam.

They said that the horsemeat was processed at the end of the day, after the normal shift had finished and the plant had been cleaned, and that workers were tasked with cutting and mixing beef, some of it defrosted from consignments with labels as old as 2001, with horse deliveries. They had to cut out "green" putrid beef, which smelled so bad that they could keep working only by tying towels around their faces. They also described having to endure brutally tough working conditions and filthy, overcrowded accommodation.

The firm has been required by the Dutch food safety authority (NVWA) to recall 50,000 tonnes of meat that was distributed from the factory to more than 500 companies across Europe, including eight in the UK and one in Ireland, in the past two years, because it was unable to show its origin. The NVWA is still investigating and on Thursday Dutch police arrested the owner, Willy Selten on suspicion of false accounting and fraud. The prosecutor's office said that the business had allegedly received 300 tonnes of horsemeat from England, Ireland and the Netherlands in 2011 and 2012 but its accounts only recorded beef. It delivered to supermarkets, meat processing factoires and butchers throughout Europe.

A spokesman for Selten denied that horse had ever been relabelled as beef. "It never happened," said Selten's lawyer, Frank Peters. However, the NVWA revealed this month that its tests on more than 150 samples of meat labelled as beef from his factory had found horse DNA in 21% of them.

Michiel Al, organiser for the Dutch meat workers' union, the FNV, said Polish workers had told him that the mixing and repacking of horse had gone on for at least five years at the Selten plant. Kowalski said he had been involved in repacking horsemeat for two and a half years. The horse trucks would come from England and Germany, and for every 10-15 parts of beef about four of horsemeat would be mixed in.

"The worst meat was always processed in overtime or on Saturdays, not on the normal shift. We'd do it to earn a bit extra. Overtime was paid in cash in envelopes," Kowalski said.

The meat would then be repacked and relabelled, some of it as organic beef, the Polish workers claim.

The workers were on zero-hours contracts and paid about €500 a month less than the minimum required by Dutch regulations for the meat sector, according to Al. The union is preparing a claim against Selten for unpaid wages.

Kowalski and other workers described regular accidents at the factory in which employees were seriously injured by butchering knives. They alleged that a Dutch worker would treat injuries in the canteen but that the company made no effort to take employees to hospital when necessary, leaving this to their Polish colleagues.

The employees were housed by Selten in mobile homes on a campsite or in a rented farmhouse in the village of Nistelrode, where the Dutch businessman has his own home. No one answered at Selten's upmarket house when the Guardian visited.

When the factory was raided, the Polish workers suddenly found themselves without a job and without money, although they were still required to pay rent. At that point, 50 of them joined the union, which has been supporting them since. Some have found other work in the Netherlands; several have returned to Poland.

Al said conditions were very poor and overcrowded when he visited the Poles in their accommodation. Six to eight workers slept in bunk beds in each mobile home. At the farmhouse, walls were brown with grime and the floor was crammed with mattresses. Kowalksi said there were up to 30 workers living in the four-bedroom house and in a neighbouring property.

The landlord, Adrie van den Berg, a former pig farmer, said he thought there were 12 per house and blamed the Polish men themselves for not being clean, and for chain-smoking and drinking beer.

Peters rejected several of the workers' allegations. Horse had been mixed with beef to meet specific orders but only for 10 months and it had never been relabelled as beef, he claimed. Where meat was old it was being recycled for pet food, he said, adding that workers were paid the legal minimum wage and wanted the flexibility of zero-hours contracts and cash for overtime.

He said that small injuries were treated in the canteen but in serious cases workers went to the doctor with a colleague. The Polish workers were responsible themselves for cleaning their accommodation and "some had stayed for years without complaints".

He said all the workers were invited and came to family and company parties. "The atmosphere was top!" he said.

The UK and the Dutch authorities have refused to identify who was taking horses to, and meat from, Selten's factory, while their investigations continue, but the Guardian revealed last month that horses had been regularly delivered from the Red Lion abattoir in Cheshire.

John Young, a spokesman for the Turner family, who own Red Lion, said horse deliveries had been properly labelled as such and were legal, although he admitted that one horse had been the subject of a recall, having tested positive for bute, the horse drug banned from the food chain.

All horses processed at the Red Lion site had been passed for slaughter by official vets, he said.